450,000 Companies may Face Action, says Union Minister P P Chaudhary

The Union minister P.P. Chaudhary said on Thursday that as many as 450,000 companies may face disqualification for their connections with shell companies as the government steps to fight against the black money holders. Assuring that genuine companies won’t face any action, the minister of state for corporate affairs said that non-compliant companies are destroying the image of genuine ones.

As the ministry takes steps in order to find and kill the shell companies, Chaudhary told PTI in an interview that the profile of all eliminated directors will be inspected. “As on September 22, a total of 3,19,637 directors have been identified and flagged as disqualified under Section 164 (2) (a) of the Companies Act, 2013… It is estimated that the final list may touch the figure of about 450,000 (directors),” the minister said. Section 164 affects to disqualification for the appointment of a director. A person who has been a director of a company that has not filed financial statements or annual returns for three consecutive years will face disqualification under sub-section 164 (2).

“It shall also be important to examine their (disqualified directors) general profile and association with other companies and the levels of their corporate governance standards,” Chaudhary said. The action of diminishing inactive companies and disqualifying directors is in the continuance of ease of doing business and good for genuine corporate, he said. “Non-compliant companies are tarnishing the image of good companies,” he added.